From 1 July 2023, the payroll tax rate is 5.5% on the taxable wages paid by employers or groups of employers.
A diminishing threshold will apply for employers or groups of employers with annual taxable wages in Australia between the annual threshold of $1 million and the upper threshold of $7.5 million. The threshold can be apportioned if you don't pay wages for a whole financial year, become a member of a group or stop being a member of a group.
Employer registration status
Show moreAn employer means any person who pays or is liable to pay, any wages. This includes the Crown in right of the State of Western Australia and an employment agent.
We calculate your payroll tax liability after you have declared your taxable wages. The calculation depends on the type of employer you are.
An employer who pays wages only in Western Australia and is not related to, or grouped for payroll tax purposes with, any other wage-paying entity.
An employer who is grouped with at least one other wage-paying entity and all members of the group pay wages only in Western Australia.
A designated group employer (DGE) must be nominated for every group and must pay wages in WA.
An employer who pays wages both in Western Australia and at least one other Australian State or Territory and is not related to, or grouped for payroll tax purposes with, any other wage-paying entity.
An employer who is grouped with at least one other wage-paying entity and pays wages in Western Australia. At least one member of the group pays wages in another Australian State or Territory.
A designated group employer (DGE) must be nominated for every group and must pay wages in WA.
Current rates and thresholds
Show moreFrom 1 July 2023, the payroll tax rate is 5.5% on the taxable wages paid by employers or groups of employers. A diminishing threshold will apply for employers or groups of employers with annual taxable wages in Australia between $1 million and $7.5 million. See videos about the diminishing tax-free threshold.
For example, if an employer pays monthly wages of $92,000, for the 2023-24 assessment year, their total wages of $1,104,000 exceed the annual taxable threshold. Payroll tax of $6,600 will apply during this period.
Use our payroll tax calculator to estimate your liability.
| Annual Australian taxable wages | Tax rate | Calculation of tax payable | |
|---|---|---|---|
| More than $1 million but less than $7.5 million | 5.5% | WA taxable wages - deductable amount x tax rate | |
| $7.5 million or more | 5.5% | WA taxable wages x tax rate | |
Previous rates and thresholds
Show more| Annual Australian taxable wages | Tax rate | Calculation of tax payable | |
|---|---|---|---|
| More than $1 million but less than $7.5 million | 5.5% | WA taxable wages - deductable amount x tax rate | |
| $7.5 million or more but not exceeding $100 million | 5.5% | WA taxable wages x tax rate | |
| More than $100 million but not exceeding $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion | WA taxable wages x tax rate | |
| More than $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion + 6.5% for wages above $1.5 billion | WA taxable wages x tax rate | |
| Period | Annual threshold | Half-year taxable threshold | Half-year upper threshold |
|---|---|---|---|
| 1 July - 31 December 2019 | $850,000 | $425,000 | $3,750,000 |
| 1 January - 30 June 2020 | $950,000 | $475,000 | $3,750,000 |
| Annual Australian taxable wages | Tax rate | Calculation of tax payable | |
|---|---|---|---|
| 1 July 2018 - when monthly Australian taxable wages are more than $70,833 | |||
| More than $850,000 but less than $7.5 million From 1 July 2019 to 30 June 2020, this amount is affected by the threshold changes in the table above. | 5.5% | WA taxable wages - deductable amount x tax rate | |
| $7.5 million or more but not exceeding $100 million | 5.5% | WA taxable wages x tax rate | |
| More than $100 million but not exceeding $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion | WA taxable wages x tax rate | |
| More than $1.5 billion* | 5.5% for wages up to $100 million + 6% for wages from $100 million to $1.5 billion + 6.5% for wages above $1.5 billion | WA taxable wages x tax rate | |
| 1 July 2016 - 30 June 2018 - when monthly Australian taxable wages are more than $70,833 | |||
| More than $850,000 | 5.5% | WA taxable wages x tax rate | |
| 1 July 2014 - 30 June 2016 - when monthly Australian taxable wages are more than $66,667 | |||
| More than $800,000 | 5.5% | WA taxable wages x tax rate | |
* A single payroll tax liability is calculated based on the combination of rates.
Calculating the diminishing threshold
Show moreA tapering value formula is used to calculate the gradual reduction in the deductable amount which employers may claim against their WA taxable wages between the annual threshold amount of $1,000,000 and the upper threshold amount of $7,500,000.
From 2020-21, the tapering value is based on the upper thresholds shown above.
TV = AT / (UT - AT or $1,000,000 / ($7,500,000 - $1,000,000)
Where
- TV is the tapering value
- AT is the annual threshold amount for the year
- UT is the upper threshold amount
This can be simplified to 2/13.
This means the threshold amount will reduce by $2 for every $13 of wages over the threshold.
The deductable amount is equal to AT - [(Wages - AT) X TV]
For example, for annual wages of $1,200,000, the deductable amount (threshold) would be
$1,000,000 - [($1,200,000 - $1,000,000) X (2/13)] = $969,231
